August 2013

Employment and Labour Bulletin

On August 2, 2013, the Supreme Court of Canada ("SCC") handed down a judgment reiterating the broad scope of immunity against civil actions granted to employers under provincial workers' compensation schemes1.

More specifically, the SCC ruled that, pursuant to this immunity, heirs of two fishermen who died at sea while performing their duties could not rely on a federal maritime statute to bring a civil action against a boat builder alleging negligence in the design of the vessel and against Transport Canada for negligence in the inspection of the same.

background

The widows and dependants of two deceased fishermen sought and obtained compensation contemplated by the Workplace Health, Safety and Compensation Act of Newfoundland and Labrador (WHSCA). They also initiated a civil negligence action against the vessel manufacturer and one of its employees, and Transport Canada, pursuant to subsection 6(2) of the Marine Liability Act (MLA):

6.... (2) If a person dies by the fault or neglect of another under circumstances that would have entitled the person, if not deceased, to recover damages, the dependants of the deceased person may maintain an action in a court of competent jurisdiction for their loss resulting from the death against the person from whom the deceased person would have been entitled to recover.

However, the Workplace Health, Safety and Compensation Commission (the "Commission") found that the action in tort related to a workplace accident was prohibited under Section 44 of the WHSCA:

44. (1) The right to compensation provided by this Act is instead of rights and rights of action, statutory or otherwise, to which a worker or his or her dependents are entitled against an employer or a worker because of an injury in respect of which compensation is payable or which arises in the course of the worker's employment.

(2) A worker, his or her personal representative, his or her dependents or the employer of the worker has no right of action in respect of an injury against an employer or against a worker of that employer unless the injury occurred otherwise than in the conduct of the operations usual in or incidental to the industry carried on by the employer.

(3) An action does not lie for the recovery of compensation under this Act and claims for compensation shall be determined by the commission.

The Supreme Court of Newfoundland and Labrador (Trial Division) and the Supreme Court of Newfoundland and Labrador (Court of Appeal) overturned the ruling by the Commission, stating that Section 44 of the WHSCA, a provincial statute, could not impede the exercise of a negligence action pursuant to the MLA, a federal statute, by reason of the doctrines of interjurisdictional immunity and federal paramountcy.

According to the doctrine of interjurisdictional immunity, a provincial statute is rendered inapplicable when it trenches on the core of a federal statute and impairs the exercise of the federal power. As for the doctrine of federal paramountcy, it states that, if provincial legislation is incompatible with federal legislation, the federal legislation must prevail.

The Trial Division and the Court of Appeal found that the statutory bar of action in Section 44 of the WHSCA infringed on the right to bring a negligence action pursuant to the rules of maritime legislation, a matter falling under federal jurisdiction. According to the federal paramountcy doctrine, Section 44 of the WHSCA should have been deemed inoperative and the negligence action under the MLA authorized.

judgment of the Supreme Court of Canada

The SCC discussed the history of the Canadian workers' compensation schemes. Following the "historic trade-off" establishing a no-fault regime, workers lost their cause of action against their employers in exchange for compensation in the event of a work accident, whether or not the employer was at fault. The employers, for their part, gained protection against civil actions in exchange for contributions to the injury fund.

In its analysis of the bar against civil actions established by Section 44 of the WHSCA, the SCC pointed out that this bar benefits not only the employer of an injured worker, but also any employer that contributes to the scheme as well as all workers of such employer, as long as the worker was injured in the course of his or her employment and the injuries occurred in the conduct of the operations usual or incidental to the industry carried on by the employer.

Thus, the SCC ruled that, pursuant to Section 44 of the WHSCA, a negligence action could not be initiated by the estate of the two fishermen against the vessel manufacturer and its worker, an employer and an employee within the meaning of the WHSCA, respectively.

The SCC rejected the application of the doctrines of constitutional law.

As regards the doctrine of interjurisdictional immunity, the SCC held that the application of Section 44 of the WHSCA, even though it regulates maritime negligence law issues, does not constitute an encroachment serious enough to impair the exercise of the federal power over navigation and shipping.

As for the doctrine of federal paramountcy, the SCC found that there were no conflicts between the provincial bar against actions related to workplace accidents and a maritime negligence claim. Subsection 6(2) MLA does not suggest that a negligence action may be initiated under any circumstances. The fact that an action may not be brought by reason of the bar established by a provincial statute is not inconsistent with the general context, intent and subject matter of the MLA.

Although this matter falls under the particular purview of the MLA, the SCC provides an interesting analysis of the history and scope of the bar against civil actions against an employer under a workers' compensation scheme.

It should be noted, however, that the SCC analysed the statutory bar against civil actions contemplated by the workers' compensation statute of Newfoundland and Labrador. The scope of civil immunity may vary depending on a given legislative text. For example, in Québec, An Act Respecting Industrial Accidents and Occupational Diseases prohibits civil actions against an employer, but authorizes, under certain circumstances, an action against a third party2.

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.